Trends emerging in the Irish Real Estate Market for 2024

A recent study by Eurostat, alongside insights from Ronan Lyons writing in TheCurrency this week, indicate a few trends emerging across the Irish property marketplace that contrast with the wider European marketplace. According to Eurostat, while house prices in the 20-member eurozone fell by 2.1 percent and 1 percent in the EU during the third quarter of last year, Ireland bucked this trend with a 1.4 percent year-on-year increase in the same period. Notably, Irish prices rose 1.5 percent compared to the second quarter, highlighting a resilience in the Irish market that defied forecasts and wider European patterns.

This trend is particularly noteworthy considering that earlier in 2023 Irish prices had shown a slight decline; however, that trend seems to have reversed, with analysts now predicting a pick-up in prices, especially outside Dublin. This growth expectation is fueled by demographic shifts, the potential for falling interest rates, and a robust economic backdrop. Within Lotus HQ, we have seen a stabilisation of sorts, and we anticipate momentum gain in house prices over the course of the year ahead.

Interestingly, the Eurostat figures for Ireland show a stark contrast with other European markets. For instance, Luxembourg, previously leading in price increases, witnessed a 13.6 percent dip in the third quarter. Similarly, German house prices saw a decline of over 10 percent  year-on-year. 

Reports from Daft.ie last week, and more recently, from myhome.ie, also support this optimistic outlook for Ireland, with myhome.ie reporting a nationwide asking-price inflation of 4.1 percent. The average asking price nationwide reached €325,000 by the end of the last year. Bank of Ireland economist Conall MacCoille expects this upward trajectory to continue through 2024. Moreover, the European Central Bank’s potential interest rate cuts, anticipated to start by mid-year, could inject further momentum into property prices. This sentiment is reinforced by statements from Portugal’s central bank chief Mario Centeno and the ECB’s emphasis on basing decisions on inflation data, wages, and bank lending figures.

As a non-bank lender for real estate and construction, these developments present both opportunities and challenges for our clients. The sustained resilience and growth of the Irish property market, especially in contrast to other EU countries, suggests a robust demand for housing. This is an opportune time to progress developments, particularly in areas outside Dublin where growth is expected to be more pronounced. However, many of our systemic blocks to delivery persist, namely planning. Looking ahead, how the market responds to potential ECB rate cuts and Ireland’s inflation trajectory will be critical. 

If you are considering a new housing project in 2024, chat to myself or any of the Lotus team for a more nuanced understanding about the supply/demand dynamics at play in your target area. 

Ian Lawlor
086 3625482

Managing Director 
Lotus Investment Group